DWELLINGS FOR SOLDIERS

Southland Times, Issue 24883, 24 October 1942, Page 4

DWELLINGS FOR SOLDIERS

Dream And Reality (Special) AUCKLAND, October 23. According to the official account of the rehabilitation scheme for returned servicemen, the soldier’s dream of home is a cosy house costing up to £l5OO, for which the Government will find the entire purchase price. The reality, as explained by an Auckland resident in close touch with returned men and their problems, is by no means such an attractive picture as that drawn by the authors of the scheme.

In the first place, the soldier has to find a house which the State Advances Department would value at the price asked for it. Then he has to obtain an option to purchase for a month while the Rehabilitation Board decides whether it will make the advance or not. More often than not, the official valuation on the property is less than the price at which the owner is willing to sell. CASH PAYMENTS If a returned serviceman is fortunate enough to get a vendor down to the amount of the proposed loan, he is still faced with the need for considerable cash payments. Should there be the slightest evidence of borer in the building, the amount of the loan will be reduced by £5O or so, the cost of compulsory treatment of the dwelling, and possibly by another £25 for painting, while the board deducts 2 per cent, of the total advance for what it calls a reserve fund. Apparently, this fund is intended to make up losses caused through inability of all the mortgagors to meet their payments. Naturally, if the amount of the loan without deductions was only equal to the price, the difference will have to be met from the funds of the serviceman. Finally, he has to pay stamp duty, amounting to £l6/10/- on a £l5OO house, and legal costs, about £l4, as well as any commission. The dwelling is valued by the Government officer in its unpainted and untreated state, and it was contended that the cost of these improvements, instead of being deducted from the loan, should be added to it. PROPERTY AGENTS’ TASK The upshot of it all, according to this agent, is that property men are becoming wary of returned soldier clients. With the best of goodwill, they still find that the amount of extra work involved by the rehabilitation plan is enormous. Often, the vendor becomes annoyed if the sale is not authorized, and he probably decides not to have anything more to do with that particular agent. An example was given in the case of an owner whose property had been put on the market at £l3OO. Two days after he had granted an option at the figure named, he was offered £1275, but he could not accept.' Before the option expired, he had a further similar offer, but the board would lend only £ll6O, less £4B deductions.

It was suggested that the Government should assist servicemen by forgoing stamp duty. During the first year of the mortgage, the new owner pays only 2 per cent, interest. It would be better for him to pay the full 4| percent. from the outset, and for the State to draw any amount it deemed necessary for its reserve fund.